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Agricultural Production, Weather Variability, and Technical Change: 40 Years of Evidence from Indi

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  • Michler, Jeffrey
  • Shively, Gerald

Abstract

We pose the simple question: how large of a role does the weather play in determining variability of agricultural production in India? Despite the long standing interest in agricultural economics of estimating the effect of weather on crop output, few quantitative measures of impact exist. We use a long panel of parcel level data from six villages in India that covers $44$ seasons from 1976 to 2011. Estimation the impact of weather variability on yield is complicated by the role of technological change over this period. In our descriptive analysis we generate several stylized facts about how agricultural production in the subcontinent has changed over the last $40$ years. Most importantly, mean yields have increased and the variance in crop production, measured relative to the mean, has decreased. In a regression context, using a multilevel model, we find strong evidence of technical change and that weather variability makes up only a small share of total variability in yield. We conclude that Green Revolution technologies have reduced the amount of weather related risk faced by farmers, even when we account for greater amounts of variation in weather due to climate change

Suggested Citation

  • Michler, Jeffrey & Shively, Gerald, 2016. "Agricultural Production, Weather Variability, and Technical Change: 40 Years of Evidence from Indi," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236342, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea16:236342
    DOI: 10.22004/ag.econ.236342
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    File URL: http://ageconsearch.umn.edu/record/236342/files/Michler_Shively_AAEA.pdf
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    References listed on IDEAS

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    1. Townsend, Robert M, 1994. "Risk and Insurance in Village India," Econometrica, Econometric Society, vol. 62(3), pages 539-591, May.
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    4. S. Viswanathan & Adriano Rampini, 2013. "Household risk management," 2013 Meeting Papers 647, Society for Economic Dynamics.
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    7. Michler, Jeffrey D. & Viens, Frederi & Shively, Gerald, 2015. "Risk, Agricultural Production, and Weahter Index Insurance in Village South Asia," 2015 Conference, August 9-14, 2015, Milan, Italy 212460, International Association of Agricultural Economists.
    8. Shawn Cole & Daniel Stein & Jeremy Tobacman, 2014. "Dynamics of Demand for Index Insurance: Evidence from a Long-Run Field Experiment," American Economic Review, American Economic Association, vol. 104(5), pages 284-290, May.
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    11. Stein, Daniel, 2014. "Dynamics of demand for rainfall index insurance : evidence from a commercial product in India," Policy Research Working Paper Series 7035, The World Bank.
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    Keywords

    Agricultural and Food Policy; Crop Production/Industries; International Development; Production Economics; Risk and Uncertainty;

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